>> LEADING THE MORNING: Lenovo's smartphone, tablets outsell PCs in first quarter, by Michael Kan: "Lenovo's sales of tablets and smartphones were higher than that of PCs in its fiscal first quarter... Lenovo's net profit reached $174 million, up from $141 million in the same period a year ago. Its revenue was $8.8 billion, a year-over-year increase of 10 percent. The Chinese PC maker reported the positive earnings for a quarter when it beat HP to become the world's largest PC maker, according to research firm IDC. During the period all of the top five PC vendors saw decline in shipments, with Lenovo's down year-over-year by 1.4 percent. Despite the struggling PC market, Lenovo has largely seen strong growth by focusing on selling PCs in its home turf of China, where it receives 42 percent of its revenue." InfoWorld

>> DEPARTURE LOUNGE: Cisco to slash 4,000 jobs in bid to move faster, by Stephen Lawson: "Cisco Systems announced Wednesday it will eliminate about 4,000 jobs, saying it needs to pare down middle management to speed up decision-making and execution. The company didn't say when or in what regions the cuts would take place, but it expects to incur related costs of about $550 million. About $250 million to $300 million of those costs will be taken in the first quarter of the company's 2014 fiscal year, which began July 28. Cisco disclosed the 'rebalancing' plan during a conference call to discuss its financial results for the quarter just ended. The company posted revenue of $12.4 billion, up 6 percent from a year earlier, and a profit of $2.3 billion, up 18 percent." Computerworld

>> MICROSOFT MISCHIEF: Microsoft botches six Windows patches in latest Automatic Update, by Woody Leonhard: "In an amazing tour de force, Microsoft's Automatic Update chute released at least five bad patches on Tuesday. Here's what's amazing: It's just 48 hours or so since the bomb bay doors opened, and Microsoft has acknowledged that it has problems with all of these patches. That's a first, I think -- and the first positive development in the Automatic Update minefield I've seen in a long time." InfoWorld

>> SINO SIREN: China Mobile chairman upbeat about possible Apple deal, by Seeking Alpha: "China Mobile's (CHL) negotiations with Apple (AAPL) over a deal for the Chinese company to sell iPhones and iPads have been progressing well and both companies are optimistic about coming to an agreement, China Mobile Chairman Xi Guohua has said." Seeking Alpha

>> CLOUD CLASH: VMware CEO: OpenStack is not for the enterprise, by Brandon Butler: "Mware CEO Pat Gelsinger says he doesn't expect open source cloud project OpenStack to catch on significantly in the enterprise market, instead he says it's more of a platform for service providers to build public clouds. It's a notion that others in the market have expressed in the past, but also one that OpenStack backers have tried hard to shake." NetworkWorld

>> WIRED WASHINGTON: Battle for fed cloud work heats up: IBM claims the big prize, by Barb Darrow: "On Wednesday, a press release comes in from IBM. Big Blue, it read, was 'awarded 10 year $1 billion cloud hosting contract to assist US Department of Interior's move to cloud computing.' … [A]fter reading further and talking to some people, it turns out that IBM is one of ten companies -- Aquilent, AT&T, Autonomic Resources, CGI, GTRI, Lockheed Martin, Smartronix, Unisys and Verizon are the others -- that qualified to supply technology and services under this admittedly huge deal. A spokesman for IBM's Federal Government group said that total worth of the contract could reach $10 billion over ten years with IBM possibly raking in 'up to $1 billion.' That IBM went so public with this speaks volumes... This particular contract was awarded months ago, but implementation was held up because one losing bidder, CenturyLink, contested the findings." GigaOM

>> HAPPENING TODAY: Microsoft fixes SkyDrive problem, issues persist with Outlook.com, by Juan Carlos Perez: "Microsoft has resolved a problem that affected SkyDrive Wednesday, but technical issues with Outlook.com have proven harder to fix. The glitches surfaced at around 10 a.m. Eastern Time on Wednesday and the SkyDrive problem was declared fixed at around 2 p.m. While access to affected Outlook.com accounts had been restored, Microsoft was still working to fix an issue affecting syncing of emails with mobile devices. By 8:30 p.m., the Live Status page, an availability dashboard for Microsoft consumer cloud services, showed the issue as still unresolved." At 5:00 am EDT, August 15, Outlook.com was still misbehaving, per the Status page. InfoWorld

>> FUD ALERT: Press suckered by anti-Google group's bogus claim that Gmail users can't expect privacy, by Mike Masnick: "Okay, so as a bunch of folks have been sending over today, there's been a bit of a furor over a press release pushed out by Consumer Watchdog, a hilariously ridiculous group that has decided that Google is 100% pure evil. The "story" claims that Google has admitted in court that there is no expectation of privacy over Gmail. This is not actually true -- but we'll get to that. This story is a bit complex because the claims in most of the news coverage about this are simply wrong -- but I still think Google made a big mistake in making this particular filing. So, first, let's explain why the coverage is completely bogus trumped up bullshit from Consumer Watchdog, and then we'll explain why Google still shouldn't have made this filing." TechDirt

>> COMING ATTRACTIONS: Microsoft names Oct. 18 for Windows 8.1 launch, by Gregg Keizer: "Microsoft today named Oct. 18 as the launch date for Windows 8.1, the update it hopes will be better received than the original, which debuted the year before... What's still unclear is whether Microsoft will make Windows 8.1's RTM available to MSDN (Microsoft Developer Network) and TechNet subscribers before Oct. 18. [Mary Jo] Foley said her sources had said they would not." Thus biting the developer hand that feeds you." InfoWorld

>> TROJAN HORSE: Google Fiber has Vudu integration on its set-top boxes, Android app, by Richard Lawler: "The Google Fiber Android app got an update today that adds support for Vudu, adding another over-the-top video service along with Netflix and YouTube. The support pages for its Vudu setup seemingly date back to August 5th, but we haven't heard anything about the launch from either company. According to its change log, the update will allow viewers to search for and view content across their TV and mobile screens.... Also new to the Android version are channel shortcuts in the main menu for faster switching back and forth." Engadget

>> BARGAIN BIN: Microsoft to push Surface tablets to businesses abroad via channel, by Juan Carlos Perez: "Microsoft will start selling its struggling Surface devices to business customers abroad via channel partners on Thursday. The move builds on a similar effort Microsoft launched in July to tap distributors and resellers to push Surface tablets to businesses in the U.S. The channel program goes into effect in Canada and 16 European countries, including France, Germany, Italy, Sweden and the U.K.... Since the Surface launch, Microsoft has cut the price of the Surface Pro and the Surface RT and run promotions to try and spur sales." PCWorld

>> CRIMES & MISDEMEANORS: Chinese underground creates tool exploiting Apache Struts, by Noriaki Hayashi: "About a month ago, the Apache Software Foundation released Struts 2.3.15.1, an update to the popular Java Web application development framework. The patch was released because vulnerabilities in older versions of Struts could allow attackers to run arbitrary code on vulnerable servers. Since then, we've found that hackers in the Chinese underground have created an automated tool that exploits these problems in older versions of Struts... We have observed attacks against Asian targets using this specific hacking tool, which indicates these Struts flaws are being actively exploited by potential threat actors in the wild." TrendMicro TrendLabs

>> UNEXPECTED LANDING: Former Steam boss Jason Holtman lands at Microsoft, by Chris Morris: "Jason Holtman, who spearheaded Valve's Steam business for eight years before leaving the company in February, has a new job. The former lawyer has taken a job with Microsoft, with a focus on PC gaming and entertainment strategy... 'Yes, I have joined Microsoft where I will be focusing on making Windows a great platform for gaming and interactive entertainment' ... At Valve, Holtman was the primary point of contact for developers that distributed games on Steam - and, to many in the gaming world, was the service's driving force." GamesIndustry

>> REVEALED: Meet the dread Pirate Roberts, the man behind booming black market drug website Silk Road, by Andy Greenberg: "If Roberts is paranoid, it's because very powerful people really are out to get him. In the last two and a half years Silk Road has grown into the Web's busiest bazaar for heroin, methamphetamines, crack, cocaine, LSD, ecstasy and enough strains of marijuana to put an Amsterdam coffee shop to shame. The Drug Enforcement Agency won't comment on whether it's investigating Silk Road but wrote in a statement that it's aware of the site and is 'very proactive in keeping abreast' of the digital underground's 'ever-evolving technological advancements.' Senator Chuck Schumer has demanded Silk Road be shut down and called it 'the most brazen attempt to peddle drugs online that we have ever seen ... by light-years.'" Forbes

>> OUT OF THE LAB: Kinect app that turns any surface into a touchscreen now available, starts at $149 , by Mariella Moon: "With several companies developing technologies that can turn any surface into a touchscreen, it should be widely available soon. Those who want to try it out before it's cool, however, should look towards Ubi Interactive's software that combines the talents of Microsoft's Kinect for Windows sensor and a projector. So long as the software's installed on a Windows 8 computer, the sensor tracks and detects movements users make on the projected image." Engadget

>> BAD SUSHI: AOL's Adap.tv has a major problem with suspect inventory, say buyers, researchers, by Mike Shields: "When it comes to online ad exchanges, the rule is, buyer beware. The same might be said for companies that acquire them.... Indeed, according to multiple digital buyers and researchers, Adap.tv, which AOL agreed to acquire last week for $405 million, is rife with suspect ad inventory. While video networks and exchanges have long had challenges with cheap gimmicky inventory like autoplay ads that appear below the fold, in-banner video ads and hidden ads with no sound, Adap.tv has a particular problem with straight-up bogus ad impressions generated by bots for the purpose of taking from advertisers, say multiple sources with first-hand knowledge of the exchange. Some experts pin the amount of suspect inventory in Adap.tv's exchange at anywhere from 30 to 80 percent. That's a lot of maybe dicey inventory for $405 million." Adweek

>> GONE HOLLYWOOD: Microsoft to fund Blake's 7 return as Xbox Live exclusive, by Simon Sharwood: "Microsoft is reportedly backing a reboot of Blake's 7, the seminal British science fiction show. The Finanacial Times' reports Microsoft feels Blake's 7 is just the kind of content it needs to encourage Xbox owners to deploy the device as an entertainment hub that deposits rivers of subscription revenue into Redmond's coffers, instead of just using it to play games. The FT's report says Microsoft has replaced cable outfit Syfy as the series' backer." The Register

>> TWEET O' THE DAY: "Whoever first bastardized the term 'epic,' I hope you get your head cut off by a gladiator disguised as a princess, y'know like in an epic." @robdelaney

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